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Offshore product sourcing soars

Published on Fri, 09/09/2011, 04:20:34

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In order to remain competitive amid the online retailing boom and difficult retail conditions, Australian retailers are increasingly sourcing their fashion from international markets like China, according to global e-commerce website Alibaba.com.

Apparel is the most in demand product category by Australian retailers on the business-to-business website, with enquiries for shoes alone almost doubling over the past year to suppliers mainly in China as well as Hong Kong, India and Pakistan.

Latest Australian figures for the second quarter in 2011 show compared to the same period last year, enquiries for products within the shoes and accessories category jumped by 97 per cent.

Enquiries made by companies for products within the apparel category, which includes wedding, evening and cocktail dresses, rose by 57 per cent year-on-year. Meanwhile, fashion accessories increased 22 per cent year-on-year.

In all three categories, businesses based in China were contacted by Australian buyers the most, accounting for over 70 per cent of enquiries.
Alibaba.com director international business development and marketing Asia Pacific Daphne Lee said to remain competitive, businesses were bypassing wholesaler intermediaries and sourcing their merchandise directly from manufacturers overseas.

“Traditional fashion retailers are doing it tough in the face of the online retailing boom and are realising if you can’t beat them, join them,” she said.

“Over the past year we’ve seen a large increase in the number of retailers sourcing their products directly from international manufacturers and wholesalers in countries such as China, Hong Kong and India, which are able to operate at significantly lower prices than in Australia.

“This means Australian businesses are reducing their costs, increasing their profitability and improving the variety and quality of products which gives them a competitive advantage.”

Lee also said the strong Australian dollar was also driving more retailers offshore.

“While some view the internet as competition to retail, we are seeing a rise in savvier Australian retailers who are taking advantage of the strong Aussie dollar and using the web to source their products at better prices and in turn improve their profits,” she said.